25 January 2014

Thought Leadership

This week I attended the Memorial Service of the late Laurie Young who died suddenly in September. I may have been the last person to speak with him as we said goodbye on the steps of the Royal Albert Hall where he had invited me as his guest in a private box at the Institute of Directors Annual Convention. (See my blog In Memoriam Laurie Young 28th September 2013 tag:People). The service was held in the beautiful St Paul’s Church in the Piazza, Covent Garden. That’s the one with the columns where Professor Henry Higgins first encounters Eliza Doolittle in the musical My Fair Lady. It is also known as the Actors’ Church with memorials to many of Britain’s most famous actors. Laurie loved plays, particularly Shakespeare, so it was a fitting place to celebrate the life and work of this sublime man.

At the Royal Albert Hall Laurie had offered me a pre-publication copy of his latest book Thought Leadership[i]. I did not accept it saying I had already ordered it from Kogan Page. After I learnt of his death I of course regretted that I had not accepted it and given my other copy to someone else. The work is excellent, highly original, as there is very little in the canon on this important subject. After the service many of us moved to the Royal Society where we met under the tutelage of SAMI consulting for another conference under the title of Blowing the Cobwebs off your mind. Laurie had invited me to participate in this last year. (see my blog The “Mind of the Market” 16th February 2013 tags: Business, Foreign Affairs) This conference was dedicated to the memory of Laurie and took as its subject Thought Leadership. The organisers, Gill Rickland who had co-written a book with Laurie and the futurists Dr Wendy Schultz and Dr Chris Yapp had decided to hold just one more such conference and dedicate it to the memory of Laurie Young. In addition we learnt that a website had been set up in his memory.[ii]

After further presentations by people who had known Laurie particularly well we started to tackle the question of what Thought Leadership is. Laurie described it as a huge industry with massive sales of selective books on business all seemingly promising silver bullet solutions to intractable problems. Then there were the consulting firms which Laurie knew from the inside who laboured to develop new ideas which they could then sell to their clients as the latest must-have idea. Often, he wrote, this was done badly, particularly in IT and professional service firms. Often it was scoped wrongly. Communications, both internally and externally, needed to be improved, and once the ideas were out there it was difficult if not impossible to refine them and ensure they were well understood.

But then, as Victor Hugo said “On résiste á l’invasion des armées; on ne résiste pas á l’invasion desidées”.[iii] (One resists the invasion of armies; one does not resist the invasion of ideas.) Chris Yapp reminded us that Laurie was passionate about the issue of cognitive bias, the idea that received wisdom gets established even when it’s simply wrong. We all know don’t we that competition reduces prices when there are many examples where it doesn’t. For example in the pension fund business in the UK a highly competitive market charges very high fees which in the course of a lifetime will cost the average pensioner half his pension. The Netherlands has a more collaborative system but management fees are a fraction of those in the UK. Related to this we must be careful to avoid believing that hype equals Thought Leadership.

We then looked at it through the window of the Three Horizons model of longer term change. This was developed by Bill Sharpe at the International Futures Forum and is a useful framework both in workshop settings and in deeper analysis.[iv] The first horizon is that with which we are familiar. It is about ‘now’ but we are often guilty of cognitive bias or received wisdom and fail to see that the growth has gone and the long term horizon is one of decline. Typically a business in this mode requires a ‘manager’ to steer its course. The second horizon offers incremental adjustment in the near future. This will provide some growth but it is generally not sustainable. Typically a business in this mode requires an ‘entrepreneur’ or someone with entrepreneurial capability, to pilot it. The third horizon offers transformational experience. There might be pockets of the future in the present but only a ‘visionary’ leader can see them and establish an emerging paradigm with innovative ideas that takes the business through strong growth into a far future.

I told my group how at Sony the original founders and their immediate successors had been such visionaries. The co-founders Masaru Ibuka and Akio Morita had the vision in the ruins of a bombed out Tokyo in 1946 to found a company dedicated to invent new products that combined mechanics with electronics. The statement of intent said “Through progress, Sony wants to serve the whole world.” In doing so the company would always be “a seeker of the unknown.” Thus when they came up with the idea of the Walkman as the visionaries they gave the idea to an entrepreneurial engineer who in turn gave his team of engineers various targets such as the size of the intended product. Meanwhile managers were running their more conventional tape recorders and radios. Thus the company was a model of using the Three Horizon framework to reinvent itself and make new markets while exploiting the old ones. Unfortunately when the founders retired and later died their successors lacked the visionary qualities and managers were brought in to make best of their assets and intellectual property.

But the model does not just work for businesses but can be effective as a tool in trying to look at social, political and economic challenges. In dealing with these challenges we may need to use new models. Some challenges look daunting. The demographics are going in the wrong direction almost everywhere you look with the number of old who no longer work starting to outnumber those in work and so call into question the entire welfare system. The world order is changing with a relentless movement in economic activity moving from West to East. The sustainability of the environment is a familiar but growing programme. We undoubtedly need new Thought Leadership in all these areas and more and we may need new models to develop it.

For example, there is the Pro-Am model where experts lead a process but invite amateur enthusiasts to contribute to it. Galaxy Zoo is an interactive project that allows the user to participate in a large-scale project of galaxy research.[v] Then there is the well-established wiki model with Wikipedia being the largest of several such schemes where millions of contributors collectively produce a useful body of information which is free to the user. The wisdom of crowds as explained by James Surowiecki is the idea that the many tend to get nearer to the right solution than the few.[vi] A refinement of this idea is that a group of experts with different disciplines will outperform a group of experts with the same discipline in solving problems. Thus the House of Lords is a better example of the wisdom of crowds as it is filled with distinguished experts from many different fields while the House of Commons is clogged up with nonentities who share very similar backgrounds and lack of real life experience even if they differ in their political views. Big Data may be another source of solutions and there are already good examples where governments and other public bodies have made data available to SMEs who use them in some useful way. Then open innovation, which predates the more familiar closed innovation, is transforming those companies who now get more ideas from their customers and suppliers than they do from their in-house research teams.

Albert Einstein said “We can’t solve problems by using the same kind of thinking as when we createdthem.” He also said “Any intelligent fool can make things bigger, more complex and more violent. Ittakes a touch of genius – and a lot of courage – to move in the opposite direction.” In working groups we considered a whole array of possible scenarios categorising them against the different horizons and then seeking to decide which models would work best in finding solutions. Nine groups produced nine entirely different results in this exercise and while there isn’t sufficient space to go into them all here it was illuminating that one group thought the new model required was a new church while another thought it was a court jester. Thus a group of futurists retreated to medieval ideas to solve the problems of the 21st century!

After Laurie Young joined the Worshipful Company of Marketors, of which I was invested as Middle Warden this week, I recommended him as a new member of our Think Tank. After I had read his book I recommended that this group should be rebranded as the Thought Leadership Committee but I also recommended that its members should read his book so that they knew what it actually meant. At his Installation Dinner this week the new Master, Michael Harrison, announced this change of name. By such things and many others we will keep Laurie’s memory alive.